Financial Intermediaries Are Able to Exploit Economies of Scale Since

question 22

Multiple Choice

Financial intermediaries are able to exploit economies of scale since

• A)the equipment or expertise necessary for one transaction can be applied to other transactions.
• B)they have special licenses needed to perform financial transactions.
• C)financial markets fail to do so.
• D)they can reduce transactions cost, but not information costs.

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Definitions:

Smokestack Scrubbers

Pollution control devices installed in smokestacks to remove or neutralize harmful substances from exhaust gases.

Socially Optimal

A situation or outcome that is most beneficial for society as a whole, often considered in the context of economic efficiency.

Harmful Chemicals

Substances that have the potential to cause damage to living organisms or the environment through exposure, inhalation, ingestion, or skin absorption.

Technology Spillovers

The positive externality that occurs when technological advancements or innovations benefit firms or sectors beyond the inventor or innovator.